By Paul Yamaguchi
Japan as "Number Two"
Japan is the second largest economy in the world, next to the United States. Japan has the second largest automobile industry, pharmaceutical industry and retail industry next to you-know-who.
Being number two is like standing in the shadow. For instance, we all know where President Bush is from, but does anyone know where Vice President Cheney is from? (He was born in Nebraska and raised in Wyoming.)
Nutraceuticals are no exception. Japan is the second largest producer of nutraceutical products in the world, next to, you guessed it - the United States. Because it is only the second largest producer, people are less knowledgeable about Japanese nutraceuticals. My mission in this column, is to help bring the Japanese nutraceutical market out of the shadow and into the light.
In NPIâs new section, Japanâs Nutraceutical Industry Update, Iâll talk about the market, new products, regulations, new developments, business news, trendsâanything related to the Japanese nutraceutical market. So if you want to learn more about the worldâs second largest nutraceutical market, you are in the right place.
$ 21 billion and still in second placeLet me start with some basic information about the Japanese nutraceutical Industry.
In the last 15 years, the Japanese nutraceutical industry (dietary supplements and functional foods) grew at an average rate of 15 percent per year. This is even more impressive when you consider that the Japanese economy grew at an average annual rate of 1.5 percent during the same time period. Among all industries in Japan, only the nutraceutical industry showed an average annual growth rate in the double-digits for the last 15 years. Back in 1987, the industry was just over $2 billion in size; today, it is $21.1 billion. (Nutraceuticals Japan 2003 report) More specifically, the nutritional supplement market is $8.5 billion and the functional food market is $12.5 billion.
Since the Japanese population is 126 million. this means that each Japanese person spends $166 per year on nutraceutical products. This compares with each American spending $136 and each European spending $92 a year. On a per-capita basis in nutraceutical consumption, Japan is number one.
Worldâs OldestJapan has become a country of seniors. 24.3 million people â one in every 5âare 65 years or older. The life expectancy for Japanese women is 85.2 years and 78.3 years for men, the worldâs longest. The largest population group, baby boomers, is already reaching age 50 and this will continue for the next 8 years. In general, as people get older, they tend to consume more nutraceuticals. Therefore, the consumption of nutraceuticals in Japan will increase over the next decade or so.Health Industry News, a leading Japanese health food newspaper, predicts that the annual growth rate of the industry will be 7 percent. By the year 2010, this translates to a market capitalization of $35 billion. Thatâs almost as high as the U.S. nutraceutical market today - Almost.
Iâll talk more about the current Japanese nutraceutical environment in future issues.
Paul Yamaguchi is president of Paul Yamaguchi & Associates, Inc., Tarrytown, NY. His company publishes a number of Japanese nutrition market reports, including Nutraceutical Japan 2003, Nutritional Supplement Japan 2003, Functional Foods and FOSHU (Foods for Specified Health Use) Japan 2003. For details and information on the reports, visit: www.functionalfoodsjapan.com or contact Paul at [email protected]